USDA Chief Economist Seth Meyer says a drive to diversify revenue streams through the growth of climate-smart commodities has potential but also needs to be better understood from an economic standpoint.
Ag Secretary Tom Vilsack has regularly pushed the idea as a form of income diversification for producers by incorporating new technologies such as anaerobic digesters and carbon farming programs. Including value-added approaches, Vilsack has argued, would allow for greater income potential and, in many cases, help farmers combat climate change.
Part of the reason for that push is consumer demand for more “climate-smart” commodities. Meyer says consumer demand for those products will determine whether producers decide to offer them.
“I think a lot of it is the consumer saying they want this product,” he said. “Farmers are really good at delivering what the consumer wants. 'What do you want? I'll make it for you. As long as you're paying for this.’”
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Small farms willing to experiment with different opportunities may have the most opportunity with the approach. Producing energy on land or marketing products directly to schools, restaurants and consumers are all possibilities. Meyer views the approach as farmers “maximizing the value of their land.”
However, Meyer still has questions about the profit potential for producers.
“What were the challenges? What's the actual environmental benefits? How can we quantify them? How can we assure consumers that they're getting the end product attribute that they want? And how can producers gain value from it?” Meyer asked.
Krista Swanson, lead economist with the National Corn Growers Association, and Scott Irwin, an ag economist at the University of Illinois, also join the show to discuss factors impacting 2023 economic projections in the farm sector, including trade, biofuel use and planted acreage.
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